Alveoli serve a vital role as the gas exchange units of the lung. Alveolization, the formation and differentiation of these small sac-like structures, is a critical yet poorly understood mechanism in lung development. Our laboratory identified P311 as a gene with a potential role in alveolization, based on its expression pattern and ability to induce mouse embryonic mesenchymal cells to differentiate into myofibroblasts, cells localized between alveoli and postulated to be responsible for their proper development and function. I hypothesize that P311 is intimately involved in the process of alveolization. I will examine, this hypothesis by: 1) determining the distribution and abundance of P311 expression in the mouse embryonic lung at different stages of development, 2) investigating the effect of the conditional functional knockout of P311 on myofibroblasts and lung development, and 3) Exploring potential mechanisms by which P311 promotes myofibroblast differentiation and alveolization.